275.260 Member's transferable interest subject to charging order.
437 words·~2 min read·
/ky/chapter-275/275-260A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)This section provides the exclusive remedy by which the judgment creditor of a
member or the assignee of a member may satisfy a judgment out of the
judgment debtor's limited liability company interest.
(2)On application to a court of competent jurisdiction by a judgment creditor of a
member or a member's assignee, a court may charge the judgment debtor's
interest in the limited liability company with payment of the unsatisfied amount
of the judgment. To the extent so charged, the judgment creditor has only the
rights of an assignee and shall have no right to participate in the management
or to cause the dissolution of the limited liability company. The court may
appoint a receiver of the share of the distributions due or to become due to the
judgment debtor in respect of the limited liability company interest and make all
other orders, directions, accounts, and inquiries the judgment debtor might
have made or which the circumstances of the case may require to give effect to
the charging order.
(3)A charging order constitutes a lien on and the right to receive distributions
made with respect to the judgment debtor's limited liability company interest. A
charging order does not of itself constitute an assignment of the limited liability
company interest.
(4)The court may order a foreclosure upon the limited liability company interest
subject to the charging order at any time. The purchaser of the limited liability
company interest at the foreclosure sale has the rights of an assignee. At any
time before foreclosure, the charged limited liability company interest may be
redeemed:
(a)By the judgment debtor;
(b)With property other than limited liability company property, by one
(1)or
more of the other members; and
(c)With limited liability company property, by the limited liability company
with the consent of all members whose interest are not so charged.
(5)This section does not deprive a member or a member's assignee of the benefit
of any exemption laws applicable to the member's or assignee's limited liability
company interest.
(6)The limited liability company is not a necessary party to an application for a
charging order. Service of the charging order on a limited liability company may
be made by the court granting the charging order or as the court should
otherwise direct.
(7)This section does not apply to the enforcement of a judgment by a limited
liability company against a member of that company.
(8)This section does apply to the issuance of a charging order against the interest
of a member or assignee of a member of a foreign limited liability company.